Home News Sensex dives 106 points as IT tanks after Infosys cuts guidance

Sensex dives 106 points as IT tanks after Infosys cuts guidance

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BSE, NSE, Sensex, Indian markets, Asian markets, 28000 mark, US markets, TCS, Infosys, market news, business news

Technology stocks took a hammering in the wake of muted guidance from Infosys, which pulled down the benchmark Sensex 106 points below the 28,000 mark at the close, while a ‘terror attack’ in France kept the market on the edge.

The IT index bore the brunt after Infosys slashed its full-year revenue guidance, which triggered a massive sell-off in the technology sector pack, where the fall was across the board.

Risk sentiment soured further after a gunman ploughed a truck into a crowd in France, killing at least 80 people, which roiled European shares.

China offered a glimmer of hope as second quarter GDP grew at 6.7 per cent, which somewhat cushioned the impact of the twin blow. Another record closing in US markets offered relief too, dealers said.

These developments apart, improving global liquidity, good monsoon and likely passage of the GST Bill in the Upper House of Parliament are seen as key factors in determining the way the market will move forward, which are expected to limit the extent of the downside.

For the week, the Sensex rallied 709.60 points, or 2.61 per cent, while the NSE Nifty surged 218.20 points, or 2.62 per cent.

Infosys plunged 8.81 per cent to Rs 1,072.25 after it cut full-year revenue guidance to 10.5-12 per cent in constant currency terms despite a 13.4 per cent growth in consolidated net profit at Rs 3,436 crore for the June quarter.

TCS too came under pressure as it fell despite better-than-expected Q1 earnings and ended 3.11 per cent down while Wipro lost 2.81 per cent.

As a result, the BSE IT index plunged 5.35 per cent while the technology index took a hit of nearly 3.94 per cent.

The 30-share Sensex crossed the key 28,000-level on sustained foreign capital inflows and higher Asian markets, tracking another record closing in the US, but could not hold on to it for long.

It slipped into the red soon after Infosys results and settled lower 105.61 points, or 0.38 per cent, at 27,836.50.

The 50-issue Nifty too ended at 8,541.40, a loss of 23.60 points, or 0.28 per cent.

“A colorless start to the earnings season and Bank of England’s status quo on interest rates provides investors to stay cautious,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

Coal India, NTPC, GAIL, ICICI Bank, Hero MotoCorp, Dr Reddy’s, ONGC, ITC and Power Grid all ran up losses.

RIL ended 0.61 per cent higher as participants raised their bets ahead of quarterly earnings later in the day.

Broader markets were mixed, with the BSE small- cap falling 0.74 per cent and mid-cap advancing 0.09 per cent.

The buying momentum continued for foreign portfolio investors as they net bought shares worth Rs 869.84 crore yesterday, showed provisional data of the stock exchanges.

Other stock markets in Asia ended higher, with Japan’s Nikkei rising 0.68 per cent and Hong Kong’s Hang Seng 0.46 per cent. China’s Shanghai Composite rose 0.01 per cent.

Europe lay low, with London FTSE falling 0.14 per cent, Paris CAC 0.48 per cent and Frankfurt’s DAX 0.35 per cent.

As many as 11 out of the 30-share Sensex pack ended lower.

“Global cues were positive early in the day, with Chinese Q2 GDP figures beating estimates, but risk appetite withdrew as day progressed, as reports of Nice terror attack weighed on European stocks, and reversed a recovery in sterling,” Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

The market breadth turned negative as 1,679 stocks ended in the red, 997 stocks closed in the green while 200 stocks ruled steady. Total turnover went up to Rs 3,913.55 crore from Rs 3,097.36 crore on Thursday.


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